Verizon agreement reached

[NewsWhore]

Verizon Dominicana and the Dominican government have reached a tentative agreement, a move that settles the dispute over capital gains tax payment totaling US$518 million, the press was told. Diario Libre writes that the deal, which is reportedly for US$200 million, less than half of the government's original request, will be finalized today, when all details would be announced at a press conference. Listin Diario quantifies the deal would be for US$160-US$170 million. This would allow Verizon Dominicana to sell the company to the Mexican corporation America Movil, if they so choose. The controversy with Verizon started when the telecommunications company announced the sale to American Movil, prompting the government to ask Verizon to pay the US$518 million in tax on the capital gains for selling the company. Diario Libre reports that the tax department (DGII) was asking Verizon Holding Corporation, owner of Verizon Dominicana, to pay a 25% tax on the US$2.06 billion sale of the company. Verizon rejected the government's request, saying they didn't owe the government anything. The standoff ensued with neither side seemingly willing to budge. The government said it would not negotiate with Verizon, and the tension threatened the sale of Verizon to America Movil. Because of the uncertainty caused by the case, America Movil gave Verizon a mid-December deadline to settle its problems or face cancellation of the sale. Both sides have instead reached this amicable agreement and the Dominican Institute of Telecommunications (INDOTEL) will now issue a resolution allowing for the sale of Verizon Dominicana to America Movil. President Leonel Fernandez headed the meeting while Finance Minister Vicente Bengoa was present, together with American Ambassador Hans H. Hertell. Also present was Verizon President Jorge Ivan Rodriguez and DGII head Juan Hernandez.

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